German Employment Growth Continues To Slow In June

In June the number of persons in employment in Germany was 40.20 million, according to the latest data from the Federal Statistics Office, an increase by 564,000 persons (+1.4%) when compared with June 2007. Compared with May, the number of persons in employment was up by 35,000 (+0.1%). So the trend of a slightly decelerating rise in employment continues, which was also observed in the last few months. The rate of job creation reached its maximum in October 2007, and has been slowing steadily since.




Slightvariations are occuring in the data at the present time, since the Federal Statistics Office is conducting a revision of the national accounts, and previous provisional monthly, quarterly and annual employment results are being recalculated from the year 2004. All additional sources of employment statistics that had become available by the time of the current calculation were incorporated into the employment accounts.

German unemployment, which has been enjoying its longest decline since reunification in 1990, fell at a slower pace in July reflecting the general slowdown in the economy. The number of people out of work, adjusted for seasonal swings, dropped 20,000 in July to 3.25 million after falling 38,000 in June, the Nuremberg-based Federal Labor Agency said today. According to the latest ILO comparable data, Germany's jobless rate was 7.3 percent in June.

EU Sentiment Indicator For The Eurozone Declines Sharply In July

Economic sentiment in the euro zone deteriorated much more than expected in July to reach its lowest level in over 5 years. In fact Europeans' confidence in the outlook for the economy dropped the most since the Sept. 11 terrorist attacks as soaring energy costs and the euro's advance against the dollar wieghed down on both consumers and executives, with the economic sentiment indicator falling to 89.5 points, its lowest since March 2003, from a downwardly revised 94.8 in June.




Sentiment in industry declined by 3 points to -8, among consumers by 3 points to -20, in the retail sector by 5 points to -9, and in construction by 3 points to -14. The services sector, which generates more than two thirds of the 15-country euro zone's gross domestic product, saw the steepest decline, by 8 points to 1. After the news was announced the euro slipped briefly from a session high against the dollar and bund futures rose.

The figures were the latest in a string of weak data, which may may point to a continuing contraction in the eurozone into the third quarter of 2008 following the now more or less inevitable contraction in the previous three months (Q2).




In Spain, we learnt this morning that retail sales suffered a record plunge year-on-year in June as a severe economic slowdown began to slam both multinational and domestic retailers.




The European Commission also said this morning that its Business Climate Indicator (BCI), which helps establish the phase of the business cycle, fell to -0.21 point in July from 0.13 in June, hitting its lowest since May 2005.Worsening business morale was accompanied by a slight fall in consumer inflation expectations for the next 12 months to 30 points from 31, the data showed.

Industry selling price expectations, however, jumped to 20 points from 16 in June, providing a mixed picture for the European Central Bank, which sees struggling to tame resurgent inflation as its principal responsibility at this point.

Retail Sales In Germany Fall Again In July

The latest Bloomberg Eurozone Retail Purchasing Managers' Index, based on a mid-month survey of economic conditions in the euro area retail sector, rose from 44.0 in June to 46.0 in July. By remaining below the 50.0 level, the index pointed to a further fall in sales during the month despite an easing in the rate of decline from the steep pace seen in June.


Retail sales fell sharply again in Germany, though to a lesser extent than in June. The month-on-month sales index rose from 44.9 to 46.4, but still indicated a rate of decline that was relatively steep by the historical standards of the series.



Of the five product categories covered by the survey, food & drink retailers reported a year-on-year increase in sales revenues in July. However, gains in annual sales in part reflected higher prices rather than improvements in volumes. For the third successive month, the steepest decline was reported for autos & fuel, as deteriorating consumer confidence hit car sales. Annual sales of pharmaceuticals were marginally lower following two months of growth. The rate of increase in prices paid for goods by retailers remained elevated in July, picking up on June to register the fourth-highest pace yet recorded by the survey. The prices index edged up to 67.3, from 67.1. Purchase price inflation hit record highs in both Germany and Italy, but eased to a ten-month low in France.


Retail sector employment fell for the fourth month running in July, with the rate of job losses unchanged on June's twenty-eight month record. The employment index held steady at 48.6. All three countries registered shrinking retail workforces, with French retailers reporting the steepest rate of decline (and posting the largest monthly fall since January 2006). In Italy, headcounts at retailers fell for the seventh consecutive month. Retail staffing levels were also trimmed in Germany, but very slightly.